BMI View: Although we expect inflationary pressures to remain subdued in Spain over the next few months,
we do not expect the country to enter a prolonged and potentially damaging period of deflation.
Our core view for Spain is that household deleveraging still has some way to run, meaning that consumer
spending (and demand-pull price pressures) is likely to remain subdued for some time to come.
This means more sluggish growth for the food and drink sector, while the lower end of the sector will
continue to outperform the rest. In line with this, we believe that Dia is one of a select few Western Europebased
food retailers with good near-term growth prospects in the region.
Headline Industry Data (local currency)
¦ 2014 per capita food consumption = +1.9%; forecast compound annual growth rate (CAGR) to 2018 =
+2.0%.
¦ 2014 alcoholic drink value sales = +0.8%; forecast CAGR to 2018 = +1.5%.
¦ 2014 soft drink value sales = +0%; forecast CAGR to 2018 = +1.9%.
¦ 2014 mass grocery retail sales = +1.8%; forecast CAGR to 2018 = +2.5%.